Quad 1-2, very healthy
Well, that is getting boring, 6 weeks of bullish tape in row ;-)
We got lucky with the Quad 1-2 call on 11/3/23!
Pullback? Possible, but that could have been said three weeks ago too. Network momentum (e.g. the Quads) is a trend following strategy week by week, so it needs a pullback to see if Quad 1-2 holds in the pullback or if it turns to the dark side (Quad 3-4). No way around it, so we have to be able to give up some of your returns until we find out. We are embracing that, if we would not, we cannot ride the bull!
We still got a Quad 1-2 —>
I does not matter where you look, breadth is good:
Quad 3 Exposures are weak (besides Coal and $URA):
Quad 4 exposures are weak too (besides $TLT):
On the strategic level:
Liquidity is up + liquidity drainers are weak (Oil & Dollar) —> tailwind for markets
Positioning is neutral and not at extremes. Lot of traders got a foot out of the door. A ton of people question the rally and that is bullish!
Inflation (see truflation.com) is hanging in there, lower than the FED rates, so at the least further rate hikes are out the window, if this goes on the FED has to lower rates next year (June?)
Bitcoin —> Jason Shapiro “I argue this is bullish” | “path much harder than direction” —>
Strategies:
CANSLIM / Breakout trading —> working, those guys have a blast!
Small cap value momentum with an earnings tilt: totally fine —>
Shorting parabolic small caps: I would pause that strategy, feedback on twitter is, that those traders having a hard time, though some still make money…
No touch: everything out of Quad 3 (Energy) and 4 (Gold, TLT etc.)
Long Duration High Beta ARKK names —> strong, very strong!
All right, the call for next week is Quad 1-2.
All the best and best regards.
Andreas
The information on from Andreas Himmelreich / QuantStrike and this video / blog is for information and discussion purposes only. It does not constitute a recommendation to purchase or sell any financial instruments or other products. Investment decisions should not be made with this video / blog, and one should consider the investment objectives or financial situation of any person or institution.
Investors should obtain advice based on their own individual circumstances from their own tax, financial, legal and other advisers about the risks and merits of any transaction before making an investment decision, and only make such decisions based on the investor’s own objectives, experience, and resources.
The information from Andreas Himmelreich / QuantStrike and this video / blog is based on generally available and paid information and, although obtained from sources believed to be reliable, its accuracy and completeness cannot be assured, and such information may be incomplete or condensed. All performance results are hypothetical and the result of back testing only. Out-of-sample performance may be different. No claim is made about future performance.
Investments in financial instruments or other products carry significant risk, including the possible total loss of the principal amount invested. Andreas Himmelreich / QuantStrike and this video / blog do not purport to identify all the risks or material considerations which may be associated with entering any transaction. Andreas Himmelreich / QuantStrike and this video / blog accepts no liability for any loss (whether direct, indirect or consequential) that may arise from any use of the information contained in or derived from Andreas Himmelreich / QuantStrike and this video / blog.